Rocky Mountain Chocolate Factory Franchise Costs & Fees
Date of Incorporation: 1981
Franchising Since: 1982
Headquarters: Durango, Colorado
Business Description: The name of the franchisor is Rocky Mountain Chocolate Factory, Inc. Rocky Mountain Chocolate Factory retail stores sell gourmet chocolates and other premium confectionery products, featuring Rocky Mountain Chocolate Factory brand candy that franchisees purchase from the franchisor’s factory, confectionery items that franchisees make in the store, such as caramel apples, and non-confectionery items, including gifts and small toys.
Franchise Offer: Rocky Mountain Chocolate Factory is offering franchises for the retail sale of gourmet chocolate and other premium confectionery products.
Financial Assistance: If a landlord refuses to allow franchisees to sign a lease and instead requires the franchisor to sign or guaranty the lease for the Franchised Location, the franchisor may sign it, in its discretion. The franchisor reserves the right to charge franchisees 10% of the total lease obligation if the franchisor signs or guaranty the lease. If the franchisor becomes liable under the lease for the Franchised Location, the franchisor will either sublease the Franchised Location to franchisees or assign it to them on the same terms and conditions contained in the landlord’s lease agreement. Except as stated, the franchisor does not offer direct or indirect financing. The franchisor does not guarantee franchisees’ note, lease or obligation.
Training and Assistance: Franchisees must complete the initial training program to the franchisor’s satisfaction. The franchisor does not charge franchisees for this training for up to three individuals, although they must pay travel, living expenses and wages for them and all employees who attend the training session. The initial training program consists of a total of 7 days of instruction and all training is currently conducted in Durango, Colorado. The training material consists of written, video and audiotaped instruction. The initial training program includes hands-on training in a mock retail store in the franchisor’s training center. In addition to the initial training program, the franchisor will provide up to five days of opening assistance at the franchisee’s Store near the time that the Store opens. As often as annually, the franchisor may require franchisees and/or their General Manager to attend in person, at the franchisee’s expense, a national, regional or local meeting, training seminar or conference that the franchisor presents for the purpose of discussing a topic such as advertising programs, new operations methods, training, management, sales, or sales promotion, to the extent that the franchisor offers any meetings, seminars or conferences.
Territory: Franchisees will operate their Rocky Mountain Chocolate Factory Store at a specific location that is referred to as the “Franchised Location” in the Franchise Agreement. Franchisees will not receive an exclusive territory.
Term of Agreement and Renewal: The length of the initial franchise term is 10 years. One renewal term of 10 years is available, if requirements are met.
Obligations and Restrictions: Franchisees (or their managing partner or principal shareholder) are not required to participate personally in the direct on-premises operation of the Store although the franchisor strongly urges franchisees to do so. If franchisees (or their managing partner or principal shareholder) do not participate in the day-to-day operation of the Store, they must designate a manager (General Manager) to be responsible for the direct on-premises supervision of the Store at all times during its hours of operation. If franchisees are a Business Entity, the franchisor do not require that the General Manager own an equity interest in the franchise. Franchisees must offer for sale through their Store only the Factory Candy, Store Candy and Items that the franchisor approves in writing. Franchisees must devote a minimum of 50% of all retail display space to Factory Candy, or in other words, chocolates and packaged candies either manufactured or sold by the franchisor. Franchisees must not offer any other type of product or service, or operate or engage in any other type of business or profession, from or through the Franchised Location, including offering candy classes or filling “wholesale orders,” which the franchisor defines in the Franchise Agreement as those orders or sales where the principal purpose of the purchase is for resale, not for consumption, or any sale other than over-the-counter sales at a price other than the price charged to the general public.
Estimated Number of Units: 275
|Name of Fee||Low||High|
|Initial Franchise Fee||$24,500||$24,500|
|Real Estate and Improvements||$25,000||$216,935|
|Furniture and Fixtures||$11,000||$32,000|
|Opening Inventory and Cooking Supplies Purchased from the Franchisor||$13,000||$29,000|
|Opening Inventory and Cooking Supplies Purchased from Other Suppliers||$4,500||$9,000|
|In-Store Promotional Graphics||$1,500||$7,000|
|Security Deposits, Utility Deposits, Business Licenses||$300||$7,000|
|Pre-Opening Training, Travel and Living Expenses||$500||$5,900|
|Additional Funds – 3 months||$10,000||$75,720|
|Name of Fee||Low||High|
|Initial Franchise Fee||$24,500||$24,500|
|Real Estate and Improvements||$12,000||$96,360|
|Furniture and Fixtures||$17,000||$38,000|
|Opening Inventory and Cooking Supplies Purchased from the Franchisor||$7,500||$11,500|
|Opening Inventory and Cooking Supplies Purchased from Other Suppliers||$500||$6,000|
|Security Deposits, Utility Deposits, Business Licenses||$1,700||$2,500|
|Pre-Opening Training, Travel and Living Expenses||$2,000||$5,000|
|Additional Funds – 3 months||$23,500||$30,800|
|Type of Fee||Amount|
|Cost of Factory Candy, Ingredients and Other Products||As stated in the franchisor’s published price lists.|
|Royalty||5% of Gross Retail Sales each month, with a quarterly adjustment to exclude payments on purchases of Factory Candy, Store Candy ingredients and other items purchased from the franchisor.|
|Interest||18% per annum.|
|Marketing and Promotion Fee||Up to 2% of Gross Retail Sales; currently the franchisor charges 1% of Gross Retail Sales.|
|POS System Maintenance and Support||Approximately $700 to $2,200 each year.|
|Successor Franchise Fee||$2,500 if franchisees renew on time or $5,000 if they do not.|
|Training Program Expenses||The franchisor estimates the costs associated with attending initial training and mandatory additional training sessions to range from $200 to $300 per person per day.|
|Store Upgrades||Estimated range is $3,000 to $15,000|
|Costs and Attorneys’ Fees||Varies under circumstances.|
|Liquidated Damages/Administrative Fee||$500 per day for liquidated damages; 15% of amount owed for administrative fee.|
|Design Fee for the Interior and Layout of Relocated or Remodeled Stores||$2,500|
|Indemnification Under Franchise Agreement||Varies under circumstances.|
|Insurance Premiums||Varies under circumstances.|
|Online Order Fulfillment Program Fee||$30 per month.|
|Gift Card Program Fees||Lesser of $0.17 per transaction and $35 per month if franchisees do not use the franchisor’s gift card vendor for processing credit cards. If the franchisee’s POS System is not capable of processing credit cards or gift cards, either $9.95 or $29.95 per month depending on the type of stand-alone card terminal franchisees choose, plus up to $30 for 100 additional gift cards and gift card presenters after the initial free supply has been used.|
|Administrative Fee||Varies up to 15% of the amount collected by the franchisor.|
|Operations Manual Return Fee||Currently $150 per volume not returned to the franchisor or not transferred to buyer.|
The above information has been taken from the FDD of Rocky Mountain Chocolate Factory. Year of FDD: 2015
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